Just about everyone is hailing last week’s settlement over Ontario’s Oak Ridges Moraine – a strip of environmentally sensitive land locked in a decade-long development dispute that rims Toronto’s northern suburbs.

"Stunning, monumental and unique," exulted a representative of Save the Rouge, a local environmental group. "Premier Mike Harris … has seen the light," declared the Globe and Mail, echoing a widely held media view. "Sometimes we do get it right and this is one of those occasions," trilled Municipal Affairs Minister Chris Hodgson, the Tory Cabinet member overseeing the negotiations.

Even the opposition parties tipped their caps to the Mike Harris government. "I do want to say thank you to the government," applauded Marilyn Churley, the NDP’s environment critic.

The cheers are misplaced. The deal cooked up by environmentalists, local residents who oppose more sprawl, developers and the Ontario government – widely touted as "win-win" for all concerned – will burn both taxpayers and the environment at large.

Here is what Ms. Churley et al. give thanks for.

The developers who were betting (and, so far, losing) they would secure permission to build 8,000 homes against local opposition from well-heeled residents no longer stare at the prospect of losing their investment. The Harris government has swapped their insecure claim to developing the moraine for land of equal value elsewhere, to be developed with the government’s blessing. The cost to Ontario taxpayers of this rescue for the developers, coupled with a public park and other initiatives driven by the government’s need to save face, could top $250-million. Amazingly, federal and local taxpayers are expected to kick in equal amounts.

Neither does the deal represent a net benefit for the environment. Yes, the moraine should remain undeveloped, both on environmental and economic grounds – the developers would have depended upon free infrastructure and other government subsidies for their profit. And yes, sprawl is a major problem around Toronto. Government policies that have promoted a haphazard proliferation of settlements have spurred wasteful energy use, unneeded highways and the conversion of high-value, Greater Toronto Area farmland into mostly low-value tract housing.

But the Oak Ridges moraine deal, while protecting ground water, only worsens sprawl. The moraine – a long, slim strip of land – will not be a buffer against sprawl, as the deal’s defenders pretend. Future developers will merely leap-frog over it, as suburban developers everywhere have done for decades, leading to increased commuting distances. As if that weren’t bad enough, the deal gives the developers, as replacement land, prime farmland just east of Toronto – known as the Seaton lands – that was involved in one of the province’s bitterest environmental battles of the 1970s.

A generation ago, the federal government, thinking Toronto’s airplane traffic would climb ever higher, expropriated land for a major new airport over intense public opposition. When the government realized the airport – destined to be a Toronto equivalent of Montreal’s Mirabel – would be a boondoggle, it embarrassedly sought face-saving outs in partnerships with other levels of government. One that emerged out of the fog was a town – Seaton – that would be a politically correct model of environmentalism. Like the airport, it, too, never got off the ground. Neither did it balm the wounds or erase the memories of residents who had their lives uprooted by government bureaucrats deciding their fates from afar.

The Harris government, by dedicating part of the Seaton lands to the developers, seems poised for another push to make the Seaton mirage materialize. Another battle could be in the offing. The Seaton lands are themselves important environmentally, as a recent consultant’s report details, and they contain a sacred native burial site to boot.

"The same developers who found themselves in a fight over environmentally sensitive lands on the moraine are going to find themselves in the same kind of battles over here," a Pickering-area councillor warned. "Preserving the moraine is great, but we have become a casualty. … What they’ve done is swap environmentally sensitive land with environmentally sensitive land." The government hopes to head off controversy through "smart growth councils" but these will only add a layer of frustrating bureaucracy. Community groups in the Pickering area are already mobilizing for action. Another decade of fighting could be in the offing, culminating in another grand compromise and another victimized community.

There is a better way, in Ontario and elsewhere. After 50 years of extraordinary subsidies from federal, provincial and local governments, our countryside is massively overbuilt, so much so that many towns and suburbs strain merely to maintain their existing infrastructure. Rather than subsidizing the creation of new communities, also destined to be unsustainable, our governments should give tax rolls and the environment a rest. Let new towns be built if developers can do so without subsidy – they will almost never be able to – and let developers meet the public’s housing needs in a marketplace free of government manipulations – they will find themselves building overwhelmingly in cities.

Finally, the government should disband its plans for province-wide smart-growth councils. No one wants dumb growth, but the government record over the decades at Pickering, Seaton and Oak Ridges – a record duplicated in communities across the country – tells us that governments are ill equipped to deliver anything else.